Wall Street may be celebrating the cost of food declining and the cost of energy rising at a more modest pace
Today, three major economic reports hit for May. One showed that retail sales fell for the first time in 11 months. Another showed that small business sentiment declined for the third month straight and that hiring plans turned negative. None of that sounds like good news; in fact, it sounds awful. So seeing the Dow Jones Industrial Average up more than 1% at midday might seem surprising. But it could be the third report that has Wall Street excited: producer price inflation, which had been rising, has slowed.
Here's the chart showing the Producer Price Index for finished goods, from the Bureau of Labor Statistics:
You can see quite clearly that PPI grew by the smallest amount last month since July. Its increase was significantly smaller than that seen from December through April.
The driver here was food prices. They fell by 1.4% in May. That's just their third -- and their largest -- decline since last June.
Energy prices, however, continued to rise. But at 1.5%, their increase was the smallest since December. This is good news as well, as it implies that energy price growth might be slowing.